PSO declares record dividend

PSO declares record
dividend

KARACHI:
The Board of Management, Pakistan State Oil (PSO), on Thursday, August
3, 2006 declared a cash dividend of Rs. 18/- per share to its shareholders
for the 4th quarter ended June 30, 2006. Combined with the earlier declared
interim nine-month dividend of Rs 16/-, the total dividend comes to Rs
34/- per share for FY06.

The announcement came following the BoM review of the performance of the
country’s largest oil marketing entity for the year ended June 30,
2006. Mr. Pervaiz Kausar, BoM Chairman, presided over the meeting at company
head office PSO House.

The BoM observed that during the period July 1, 2005-June
30, 2006, the company sales revenue reached Rs 353 billion compared to
Rs 254 billion in the previous year. Consequently, PSO recorded profit
before tax of Rs. 11.7 billion, up by 27% over last year, and profit after
tax of Rs 7.5 billion, up by 33% over the same period.

The earnings during the period were impacted by higher
financial costs due to outstanding receivables from the government. However,
better management of resources reduced the adverse impact on profitability
and cash flow of the company.

Geopolitical and supply factors resulted in higher prices
of petroleum products internationally causing a decline of consumption
in all fuel categories. Diesel usage reduced by 4.6%, Motor Gasoline by
10.5%, while increased power generation demand positively impacted on
Furnace Oil consumption by 11.4%.

New entrants in dynamically competitive petroleum sector
significantly affected the market composition and posed challenges to
the established OMCs. It is worth noting that despite the increasingly
stiff competitive market situation, PSO again emerged as leader with 65%
share on overall basis.

PSO improved its retail marketing position in gasoline
and CNG with the introduction of value-added products and services. The
company also added over 200 New Vision outlets to its retail network.
The total number of New Vision Stations now exceeds 1,450.

Tapping of future potential in Cards and Non-Fuel Retail
business, based on dedicated teamwork, ensured enhanced market share in
Motor Gasoline from 44.7% to 45.3 and sustained market shares in other
products. A number of marketing initiatives in collaboration with major
brands were launched during this period.

To meet the ever-growing CNG demand, in addition to persistently
increasing CNG facilities at PSO outlets, the company pioneered an innovative
concept of Mother-Daughter CNG facilities at retail outlets on highways
where piped gas is not available.

The BoM noted that the company achieved over 32% market
share in Lubricants, despite the unfortunate fire incident in July-05
at Lube Manufacturing Terminal at Korangi and ever-increasing base oil
prices. The insurance claim relating to this incident has been settled
to the company’s satisfaction.

Company’s ERP initiative - SAP became fully operational
on July 1, 2005 and all systems are largely streamlined on real-time basis
and information is now available expeditiously to help business decision-making.

The year was marked by national and global recognition of PSO’s
corporate transformation and strategic development. In addition to World
Economic Forum membership, PSO obtained a lead role at World Business
Council of Sustainable Development (WBCSD) Geneva, Switzerland, becoming
the first company in Muslim world to have its CEO on Business Role Focus
Areas Core Team (FACT) as well as obtaining the top-most advisory position
at WBCSD for one of its General Manager.

Due to the importance PSO places on Corporate Social
Responsibility, the company participated in various activities and provided
support and assistance targeting health, education, social and national
areas. In October 2005 earthquake relief operations, PSO refueled 2,800
foreign relief flights very efficiently and made arrangements at Muzaffarabad
for providing fuel to relief helicopters. The company also contributed
Rs. 30 million and employees donated their three-day salary to the President
Relief Fund. PSO was the focal point for the LPG cylinders supply to the
affected areas. PSO efforts in this regard were highly appreciated by
all concerned.

PSO as a responsible corporate citizen partnered with
various institutions involved in health sector like Marie Adelaide Leprosy
Centre, the Kidney Center, Jinnah Post Graduate Medical Center, NICVD,
Children Cancer Foundation, etc. In education, the company supported The
Citizen Foundation, Ummed Foundation, LUMS, and several other national
institutions.

The Board appreciated the company’s commitment
to corporate social responsibility (CSR) and environment protection and
hoped that it will continue to achieve higher standards in HSE to make
the society healthier place to live in.

The BoM acknowledged the enormous efforts and contributions
by the highly motivated and dedicated employees, dealers, cartage contractors,
vendors and other stakeholders without which the impressive achievement
of the company would not have been realized.

The Board of Management expressed confidence that with
numerous marketing initiatives, the company will meet future challenges
through differentiated products and services, enhanced utilization of
technology, continued operational excellence and innovative value-addition.